David Archer and Alex Cameron

The role of the Senior Independent Director

‘… the SID also needs to be able to act as a lightning rod – picking up signs of emerging conflict or disquiet amongst fellow board members and giving voice to it at an appropriate time (particularly when the Chair is not responding to these tensions) so that issues don’t fester.’

Alison Gill

70% of FTSE 350 Chairs under pressure to step down

‘The purpose of a good Chair isn’t to lead thinking for the board, but rather to be an independent facilitator. Someone capable of encouraging people to think around topics and seek knowledge and data to make good decisions, instead of relying on existing beliefs.’

John Dawson and Michael Henson

Caveat praesidium – Chair beware

‘It is easy to see how for many boards having short tenure Chairs may create unintended consequences. Understanding these potential consequences could start influencing the appointment process and potentially lead a nomination committee to disqualify otherwise highly qualified candidates due to restraints on tenure length.’

Margaret-Ann Splawn

Climate governance considerations for boards

‘Climate change poses challenges for boards on many levels. It is a risk that is unique for businesses in its scope and scale, yet due to the complex and diverse nature of the issue, it remains poorly understood by many.’

Boris Nikolov, Erwan Morellec, and Norman Schürhoff

Measuring governance

‘Instead, the findings show that firm specific factors account for most of the differences. Firms with more cash, higher market-to-book ratio, and more intangible assets demonstrated the greatest cost impact from the conflict of interests.’

Neil Hare-Brown

Cyber risk

‘There must be a challenge to the current status quo. Boardrooms have become over-reliant on technical teams for advice and, as a result, restricted in how they can manage cyber risk from a strategic level. If controls are maintained only at operational level with no foundational strategy to maintain them then the overall cyber resilience is likely to be flawed.’

Daniele Vitale

European 2019 AGM season

‘One of the most notable findings in our analysis is how much more willing investors are becoming in opposing board members directly when they consider that there have been corporate governance failings.’

Yin-Hua Yeh

How to leave a lasting legacy?

‘The value of a well-designed succession plan is indisputable: firms which fail to provide a clear framework for succession after the passing of a founder often experience severe difficulties. However, merely having the vision to design a succession plan does not guarantee success. The further dimension to take into account is human nature.’

Alex Cameron and David Archer

Engaging boards with climate change – Part 2

‘Others emphasised the benefit of linking climate change reporting to a board’s normal financial reporting cycle and saw the principles issued by TCFD (Task Force for Climate- related Financial Disclosures) as a useful standard, requiring companies to engage with stakeholders and explain how they were contributing to reducing climate risks.’

Gay Haskins and Alison Gill

Kindness in leadership

‘A number of our interviewees ... suggested that kind leadership behaviours had a strong positive impact on organisational well-being and performance. For employees, the result is greater contentment, higher motivation, higher engagement and participation. Teams and management, they found, were more creative and innovative, with positive relationships more prevalent.’

Dr Florian Schilling

CG – science, craft or art?

‘Governance is about the quality of management supervision, ensuring that the company is managed in the interest of shareholders and other stakeholders. Compliance is about adherence to rules and regulations which are a necessary, but not a sufficient, condition for good governance. Used in the context of a football game, governance describes the quality of the game, while compliance ensures playing by the rules.’

Professor Colin Coulson-Thomas

Changing requirements and the future of CG

‘The structures, memberships and practices of boards may need to change to ensure that they remain relevant and can continue to discharge their responsibilities, including providing the responsible, shared and transformational leadership required to cope with a changing and uncertain business environment.’

Yin-Hua Yeh

Succession planning in family firms

‘I have found that if the founding entrepreneur has planned and formulated the succession process earlier, and if the successor has been guided by such a well-structured process for training and empowering his decisions, then business value during the process of succession tends to suffer less or in fact even increase as there is less likelihood of a damaging power struggle.’

Michael Henson and John Dawson

Modernising the UK AGM

‘While some boards may be reluctant for the fear of challenge, the reality is that visible stewardship through engagement is a corollary to strong governance and empowers both management and the board. This is governance in action.’

Paul Lee

Accountable capitalism

‘It has long been a personal red flag of mine to worry about companies whose only stated aim is the promotion of shareholder value. So many such companies boom marvellously for a short period of time and then see massive value destroyed as they find that narrow self-interest destroys value over time – destroying the very thing the directors claim to be targeting.’

Hans-Kristian Bryn and Carl Sjostrom

A new governance framework

‘Given that complex organisations are governed by layers of management, shareholders and public oversight, there is great benefit in articulating these boundaries by defining the company’s reward philosophy and risk appetite.’

David Archer and Alex Cameron

What price climate change?

‘A lack of consistent financial evaluation of the timing and scale of climate change impacts was cited as a barrier by several respondents – and this was linked with another barrier, the perceived gap between the long-term effects of a warming climate and a much shorter-term focus to most boardroom discussions.’

Bob McCormick and Rob Zivnuska

Shareholder engagement

‘As US-based investors build out their engagement teams in Europe and beyond, and European-based investors grow their presence in the US, a continued cross-pollination of engagement themes and styles is a likely result. Being able to adroitly navigate the shifting landscape will be a defining challenge for companies and boards in the years ahead.’

Professors Joan Loughrey and Terry McNulty

Too much expected of section 172?

‘Although the FRC’s Guidance on Board Effectiveness states that in order to protect the company’s long-term interests, difficult board decisions may “sometimes” adversely impact stakeholders, section 172 cannot prevent directors taking actions that are contrary to stakeholder interests or even the long-term interests of the company. No doubt such a company would not thrive. Nevertheless the section does not guard against bad business judgements taken in good faith.’

Anne Kirkeby

More authenticity?

‘Society and key stakeholders have more expectations than ever before in companies and they expect companies to be part of the solution within society, rather than the problem. The growing recognition that “good” business behaviour supports strong financial performance is becoming the norm.’

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